What is the difference between property tax and tangible personal property tax? While property taxes are commonly understood as payments on your home or land, tangible personal property is a less common term used in real estate. Referring to physical objects other than the literal land or building, personal tangible property is important in commercial and rental businesses. Here is the basic info to know about personal tangible property and associated taxes:
Tangible personal property examples
Some examples of business assets qualifying as tangible personal property include:
- furniture
- production machinery
- computers
- delivery vehicles
Individuals and households may have personal tangible property such as:
- jewelry
- collectibles
- sports & hobby equipment
You can think of tangible personal property as anything of value with physical existence. Other assets, such as patents and copyrights, do not count as tangible personal property as they are not literally tangible.
How tangible personal property taxes work
Similar to regular property taxes, personal tangible property taxes are based on a percentage of either the asset's sale price or assessed value. Landlords and businesses have to report these assets on a tax return, as long as they are related to a business. Taxes are paid to the local government, and in some cases can qualify for tax deductions on federal income tax returns.
Understanding personal tangible property taxes is crucial if you're planning on investing in a commercial or rental property. Keep this basic info in mind when considering your next move in real estate investment.
About the Author
Taylor Stewart
Taylor Stewart was born and raised in Richmond, Va. He attended Elon University on a baseball scholarship, but after suffering an unlikely injury, he was forced to give up on his dreams of making it to the big leagues.In 2006, Taylor moved to Bonita Springs, FL to pursue a career as a Professional Golfer. After traveling up and down the east coast of the United States playing in various golf tournaments on various golf tours, Taylor suffered yet another injury and was forced to change his career plans. Now, as a real estate agent,Taylor as chosen to put the same drive and determination that made him successful in sports, into helping others find their own piece of paradise in southwest Florida. Especially for those living in or looking for that perfect golf community, Taylor is able to guide his buyers and sellers through his expertise of the golf game and southwest Florida golf courses. Taylor is"Your ace in the hole."